A firm has the choice of offering "dirty" jobs that are likely to cause severe health problems for its workers or of offering "clean" jobs by installing safety equipment at a cost of $5 per hour per employee that will substantially reduce the chances of health problems. The firm will

Question

A. install the safety equipment if workers can ascertain whether they are working a dirty or a clean job.
B. never willingly choose to install the costly safety equipment.
C. willingly install the safety equipment if workers are willing to be paid $7 per hour less in a clean job than in a dirty job.
D. install the safety equipment if workers are willing to be paid $3 per hour less in a clean job than in a dirty job.
E. never install the safety equipment without a government subsidy to do so.

Answer 1

Answer: C